IBM to Sell Its Stake in Venture to Toshiba

From Reuters

IBM Corp. will sell its half of a chip-making venture to partner Toshiba Corp., a U.S. unit of the Japanese company said Tuesday.

Toshiba America Electronic Components Inc. said it will buy IBM's share of Dominion Semiconductor, a joint venture the two companies established in Manassas, Va., in 1996.

Details of the agreement were not disclosed, but a Japanese newspaper, quoting Toshiba sources, reported earlier that Toshiba would pay about $165 million to $250 million to buy out IBM's share of the venture, which produces dynamic random-access memory chips, or DRAMs.

The sale, expected to be completed by the end of next year, would not take IBM out of the DRAM business, since the Armonk, N.Y.-based firm produces DRAMs at several locations worldwide.

However, industry sources noted that the sale would mesh with IBM Chairman Louis Gerstner's goal of backing away from the low-profit DRAM business to focus on more sophisticated and profitable semiconductor categories.

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